Ghana’s economy rebounds, to expand in third and fourth quarters – Bank of Ghana

GHANA – Ghana’s economy is showing signs of recovering from the adverse effects of the corona virus pandemic and is projected to grow by at least two percent this year, according to Bank of Ghana’s (BoG) most recent projections.

The latest projection is a revision of the 0.9 percent growth the BoG gave in the early part of the year when the Coronavirus pandemic was at its peak.

Bleeding from the injuries sustained during the pandemic, the Ghanaian economy contracted by 3.2 per cent in the second quarter this year.

The Governor of the BoG, Dr Ernest Addison, who released the current projections during the Bank’s 96th Monetary Policy Committee news conference in Accra said the economy was experiencing a gradual rebound hence the positive outlook.

He explained that despite the contraction in the second quarter growth, data available to the BoG “showed some green shoots of rebound in economic activity.”

He said, “A sustained level in consumer and business confidence and broad-based growth in the indicators of the CIEA are all supportive of positive growth conditions in the outlook”.

“Things are turning out better. The dip in economic growth is not as deep as we anticipated.”

Dr Ernest Addison- Governor, Bank of Ghana

The Ghanaian economy has also begun to experience some recovery as price pressures that resulted from the pandemic-related restrictions and lockdown measures in March 2020 are easing, the BOG Governor said.

 Headline inflation, after edging up sharply to 11.4 percent in July 2020, has started going down and currently stood at 10.5 percent, on the back of declining food prices.

Food inflation has also steadily declined from 15.1 percent in May to 11.4 percent in August, partly reflecting seasonal effects.

Dr. Addison explained that the drivers of economic growth were returning to normal with prospects for a good recovery, indicating that the “underlying inflationary pressures are also easing”.

He further noted that the inflation expectations of businesses, consumers and the financial sector, derived from the bank’s latest round of surveys had moderated.

That, according to BOG, was as a result of supportive monetary and fiscal policies, which had provided the necessary underpinnings for the economy to withstand the negative output shock from the pandemic.

The Governor observed that the rebound in the global economy would serve as a catalyst for Ghana`s growth.

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